11/21/2012 09:58 am ET Updated Jan 21, 2013

James Bond's Toughest Foe? The Great Recession

The 23rd James Bond film, Skyfall , has turned into a bonanza at the box-office, becoming the most successful entry in the franchise in just 10 days. In the new film, Bond is asked by his adversary what his favorite hobby is. "Resurrection," the superspy answers. Which is the truth since the character was effectively dead in 2010. What killed him? Not a megalomaniac seeking world domination but the crippling recession. There is no question that the credit crunch hit Bond very hard and set off a series of austerity cuts. At around $150 million, Skyfall is way cheaper than the previous Bond picture, Quantum of Solace (the first Bond film, Dr. No, was made for pennies -- $1 million); where the initial script called for shooting in six countries, they ended up with a film largely shot in London and the nearby highlands of Scotland. What's more, they signed a $45 million product placement deal with Heineken, which gets Skyfall into beer ads worldwide. That's a third of the budget from one product-placement deal. Other deals were inked with Omega, OPI Nail-polish, Coke Zero and Swarovski.

But, for 007, it could have been much worse. He could have gone the way of Lehman Brothers. At the height of the recession in 2010, producers Barbara Broccoli and Michael G. Wilson issued a statement saying that the franchise was "suspended... indefinitely". For those of us who follow the capital markets, the story of how Bond came back from the credit crisis is every bit as exciting as the rooftop chase of the new film. And if Bond is any indication, it may signal a new era of cost cutting in film that brings a human scale back to Hollywood films.

The Debt They Carried

The major issue behind Bond's demise was that the studio behind the 50-year old franchise, MGM, was saddled with about $4 billion in debt (interest payments alone totaled $250 million a year) owing to some ill-advised business moves and a string of bombs over the years including Cutthroat Island and Josie and the Pussycats. A dizzying series of companies stepped up as potential investors or buyers through the 1990s and the aughts but none proved to be the magic bullet. Then the recession hit. Here we can see a parallel story to the bedeviled auto industry at the time.

Despite having a library of extremely valuable assets (Bond, remakes of RoboCop and Carrie in the pipeline, and a stake in Peter Jackson's The Hobbit), the risk profile was too tough for skittish investors and there was simply no private capital to be had to effect the rescue on the right terms (MGM couldn't resort to the government for a bailout the way the automakers were able to). When it filed for bankruptcy protection in 2010 (rejecting bids by Time Warner and Lions Gate Entertainment, among others, which didn't meet the minimum asking price of $2 billion) control passed to a group of creditors which included JPMorgan Chase and two hedge funds, Anchorage Advisors and Highland Capital Management.

Meanwhile, Skyfall was in freefall as producers met all over the world with a revolving door of investors and executives trying to get a straight answer on whether filming could proceed. One can imagine how difficult it was for Broccoli and Wilson because they had assembled the A-list of Hollywood talent to work on the film, including Oscar-winning director Sam Mendes (American Beauty), cinematographer Roger Deakins (No Country for Old Men), editor Stuart Baird (Superman) and an extraordinary cast, all of whom were turning away work in the hopes that Bond would get a new lease on life.

The turnaround came when the new bosses hired former Spyglass Entertainment chiefs Gary Barber and Roger Birnbaum as co-chairmen (Birnbaum has since announced his departure) who went on an aggressive reorganization to control the company's bank debt and to strengthen their cash position. They also announced, in February, a $500 million revolving credit line through JP Morgan and Deutsche Bank and paid off a $325 million loan. The new Barber-and-Birnbaum, post-recession MGM is doing what corporations across America are doing -- cost cutting and building up their balance sheets. MGM now co-invests on films (a way to cut down risk), gives distribution and marketing for the projects to its partner studios and takes the international television distribution rights for new and old films. So, with The Hobbit: An Unexpected Journey and The Hobbit: There and Back Again, MGM's partner is Warner Brothers; while with GI Joe: Retaliation, its Paramount. Birnbaum and Barber, partners for 15 years, received stock options which will be a windfall when MGM goes public next year.

Post-Recession Bond

So, was it worth the wait? Is life better the second time around for Bond? For those who study it, 1964 is the key year in the Bond franchise because it marked the moment when the films turned from the seriousness of From Russia With Love to the wit and frivolity of Goldfinger. Since then, every film has navigated this divide. Skyfall is very much the former -- a taut, somber film which saddles Bond with a lot of childhood angst and offers an Oedipal drama in his relationship with Judi Dench's M. What's interesting is how the recession has tempered the usual excesses of the franchise with its serial explosions, gargantuan sets and flashing gadgetry. Instead, director Sam Mendes has made an old-fashioned thriller, eschewing CGI effects for smaller set pieces and a more human scale.

Bond's gadgets this time are practically quaint -- his Walther PPK and a radio transmitter. And that austerity and resourcefulness extends to the filmmaking. Mendes crisply directs the actions sequences with a yeoman's regard for craft and spacing so we always know what's happening and where everybody is (compare this to the ostentatious editing and visual gibberish that was the last Bond film, Quantum of Solace). For fans, this is a welcome return to the simplicity and physicality of the early Connery films. Remember that the best Bond films were made by journeymen directors who few had heard of -- people like Guy Hamilton, Terence Young and John Glen -- artisans who understood storytelling and pacing. Mendes wisely takes his cue from them and shows a lot of care in the way he builds his scenes. The problem? What's been left behind this time is charm and lightness. Daniel Craig's Bond is like an artillery shell -- tough, expressionless and unyielding -- with a personality to match. While he may be the most physically agile Bond (he did his own stunts and the crew was afraid for his life) and the most credible as a dangerous operative, he lacks (to these eyes) the lived-in glamour, decadence and cheek that made Bond such a memento of the Camelot era (Bond was JFK's favorite character).

Bond was an embodiment of post-war prosperity and Cold-War irony and that's what made him the paragon of cool. It falls to Javier Bardem to bring that elegance to the film. This great Spanish star extends his charisma to the second half of Skyfall, lends it an eccentric warmth and locks the picture into a nice rhythm. He may be the best villain since Gert Fröbe's Goldfinger. For all its virtues though, the film ultimately belongs in the second rank of Bond pictures, behind The Spy Who Loved Me, Goldfinger, From Russia With Love and Casino Royale. But it is a return to a simpler era and that's a good thing aesthetically and economically. Necessity is the mother of invention and smaller budgets almost always beget more interesting films. For MGM and its fortunes going forward, Skyfall is the comeback it needed, the ultimate symbol of its recovery. Resurrection indeed.